In this article, we’ll explore Jim Cramer’s List of the Top 10 Stocks to Watch.
In a recent episode of Mad Money, Jim Cramer highlighted a striking development in the stock market:
Warren Buffett, a legendary investor, has been selling off large amounts of stock, including big holdings in Bank of America and Apple. This move is surprising, especially since Buffett had recently shown confidence in the iPhone-maker.
“Buffet’s the best there is. So he’s the best. People looking at his moves end up extrapolating to the point of absurdity and that’s why they dumped the bags. “
Cramer pointed out that Buffett’s decision to sell, particularly as the market averages are falling, causes concern for everyday investors. It raises doubts about whether they should follow suit, even though the bank he sold just reported a strong quarter. Cramer’s commentary highlights how significant investment moves by top investors can influence market perceptions and make investors question their own decisions.
“On Thursday morning, we were misled into thinking the economy was heading for a recession, potentially even a global one, just because of Japan’s situation. The safest move seemed to be selling, even though Japan’s market had bounced back by 10% the next day. What mattered was that the smart money was exiting the asset class, making us feel foolish for holding on. In reality, it was the uninformed money that was selling, driven by nervousness about Buffett or his assistants. We had no insight into the reasons behind his decisions.”
Jim Cramer also discussed the recent market swings, focusing on the surprising rally that began just ten days ago. He highlighted the significant gains, noting that the Dow had surged by 555 points, the S&P had climbed 1.61%, and the NASDAQ had jumped 2.34%. Cramer stressed the importance of understanding the sharp decline two weeks earlier when the Dow dropped 2.6% and the NASDAQ fell 3.43%.
Cramer explained that while the market’s meltdown on that Monday seemed confusing, it created a valuable chance to buy high-quality stocks at low prices. He pointed out that even during market downturns, there can be hidden opportunities.
“I want to talk to you about the obstacles to catching a tradable bottom because they are incredibly powerful at the lows. Two weeks ago everybody wanted to not buy even though in retrospect, it was a tremendous opportunity to purchase some high-quality stocks at bargain basement prices.” Cramer said.
Cramer also referred to a Wall Street Journal summary, which described the market turbulence caused by the collapse of popular trades and the Yen carry trade issue. This turmoil echoed the severe market crash of 1987 and raised concerns about major technology stocks. Cramer’s insights remind investors of the challenges in navigating market lows and the potential opportunities that can emerge from them.
“We were told that the Yen carry trade broke up and apparently that’s a massive and lasting problem. Sometimes just to see how bad it is, it pays to look at the next day summary in the Wall Street Journal because it’s the most authoritative real-time account of all the pure, the pain, and fear people experience under the headline.”
Jim Cramer also addressed the confusing reasons behind stock sell-offs and how they can often be misleading. He stressed that while selling stocks during a market downturn might seem like a wise move, it’s important to carefully evaluate these reasons to avoid making poor investment choices.
Cramer then explained the concept of the carry trade, where investors borrow money in a currency with low interest rates, like the Japanese Yen, and invest it elsewhere. When the Bank of Japan unexpectedly raised interest rates, the cost of borrowing jumped. This sudden increase forced institutions that had borrowed in Yen to sell off their stocks quickly to raise cash. As a result, even strong stocks were sold off.
Cramer pointed out that while this sell-off seemed severe, it was mainly due to a short-term issue rather than a fundamental problem with the market. He criticized the media for exaggerating the situation as a long-term crisis, reminding investors to look past dramatic headlines and understand the real reasons behind market movements.
Our Methodology
For this article, we reviewed a recent episode of Jim Cramer’s Mad Money and selected ten stocks that he discussed. We’ve also included the hedge fund sentiment for each stock, and ranked the stocks in ascending order of the number of hedge funds that own them.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Jim Cramer Reveals Top 10 Stocks to Watch
10. CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Investors: 33
Jim Cramer expressed strong enthusiasm when asked about his thoughts on CAVA Group, Inc. (NYSE:CAVA), calling it “the best new concept” and emphasizing his positive view of the company. He noted that although CAVA Group, Inc. (NYSE:CAVA) had experienced a 10-point drop the previous week, it had since rebounded.
“I love Cava. Cava’s real. It’s the best new concept. I like it. It was down 10 points last week, and we recommended it. So now that it’s all the way back up, why don’t you give it a rest before jumping in, alright?”
CAVA Group, Inc. (NYSE:CAVA) has demonstrated strong revenue growth by expanding its number of stores and achieving impressive sales at existing locations. Its focus on Mediterranean cuisine within the fast-casual dining sector helps distinguish it from competitors, potentially leading to sustained long-term growth and a larger market share.
Analysts are confident in CAVA Group, Inc. (NYSE:CAVA)’s future, as evidenced by their increased price targets for the stock. CAVA Group, Inc. (NYSE:CAVA)’s recent earnings report surpassed expectations, boosting forecasts and increasing optimism about its potential.
9. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Investors: 40
Nucor Corporation (NYSE:NUE), one of North America’s largest steel producers, is well-positioned for future growth due to its diverse range of products that include steel mills, steel products, and raw materials. When a viewer asked Jim Cramer whether it was time to cut losses or hold on to Nucor Corporation (NYSE:NUE), Cramer advised against selling. He explained that while we might expect big steel companies to perform differently, they are still tied to the economic cycle and any downturns.
“Oh no! Don’t sell Nucor. We sometimes want these big steel companies to be something other than what they are, but in the end, they’re still tied to the earnings cycle and any economic downturn. However, when the Fed starts cutting rates, Nucor will be the first stock people reach for—including me, for my charitable trust. So please, do not sell the stock.”
Nucor Corporation (NYSE:NUE) is strategically boosting its production of high-margin steel products, particularly those used in the automotive and construction industries, which should enhance profitability. Nucor Corporation (NYSE:NUE) is also investing heavily in sustainable steel production technologies like electric arc furnace (EAF) technology, aligning with the increasing demand for environmentally friendly materials. This investment could position Nucor Corporation (NYSE:NUE) as a leader in the industry.
Furthermore, Nucor Corporation (NYSE:NUE)’s strong financial health and efficient operations offer resilience during economic downturns, enabling the company to consistently return capital to shareholders through dividends and share buybacks. With potential government infrastructure spending likely to increase demand for steel products, Nucor Corporation (NYSE:NUE)’s growth prospects remain strong.
8. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Investors: 48
Royal Caribbean Cruises Ltd. (NYSE:RCL) has shown impressive recovery from the pandemic, driven by a surge in travel demand, especially for cruises. This strong demand has led to excellent financial results, with Royal Caribbean Cruises Ltd. (NYSE:RCL) surpassing earnings expectations and increasing its annual forecast. Jim Cramer praised Royal Caribbean Cruises Ltd. (NYSE:RCL), pointing out that the stock demonstrates strong resilience. He observed that each time Royal Caribbean Cruises Ltd. (NYSE:RCL) experiences a decline, it quickly draws in many buyers, reflecting robust investor confidence and consistent demand.
“I like Royal Caribbean because every time the stock comes down, there’s like thousands of buyers coming in every time.”
Royal Caribbean Cruises Ltd. (NYSE:RCL)’s success is also evident in its strategic achievements. Royal Caribbean Cruises Ltd. (NYSE:RCL) reached its Trifecta goals—focused on improving profitability, return on invested capital, and earnings per share—18 months ahead of schedule. The expansion of its fleet with new ships like the Icon of the Seas and the upcoming Star of the Seas caters to varied traveler preferences and boosts booking interest.
Although Royal Caribbean Cruises Ltd. (NYSE:RCL) recently experienced a decline due to broader market trends, analysts remain positive about the company. Royal Caribbean Cruises Ltd. (NYSE:RCL) is rated a “Strong Buy” by analysts, who foresee substantial growth potential.
Ariel Fund stated the following regarding Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q2 2024 investor letter:
“Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL), advanced on another quarterly earnings beat and subsequent raise in full-year guidance. Stronger than anticipated consumer demand, healthy onboard spend, robust pricing and solid cost containment lifted recent results. Additionally, RCL is benefitting from several new megaships, more island destinations and re-entry into the China market. The resiliency of the core cruise consumer, in combination with management’s superior operational expertise and revised earnings outlook, lays the foundation for RCL to exceed its three-year strategic imperative, the Trifecta Program, a year earlier than expected.”
7. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Investors: 69
Snowflake Inc. (NYSE:SNOW) operates in the rapidly expanding cloud data warehousing and analytics sector. Its platform helps companies manage and analyze large volumes of data across various cloud environments. When a viewer asked about his thoughts on Snowflake Inc. (NYSE:SNOW),
“The latest feedback I’m getting about Snowflake is that they’re facing some difficulties and are being challenged by a couple of companies. It’s kind of a tough road for them right now. I think I’m going to hold off on recommending it.” Cramer said.
On a positive note, a major factor behind Snowflake Inc. (NYSE:SNOW)’s remarkable outlook is its high net revenue retention, which shows that existing customers are increasing their spending over time. Snowflake Inc. (NYSE:SNOW) is also growing its product lineup with new features for data sharing, application development, and AI/ML, which attract more customers and encourage them to stay.
Snowflake Inc. (NYSE:SNOW)’s partnerships with major cloud providers like AWS, Microsoft Azure, and Google Cloud strengthen its market position. As more companies move their data to the cloud, Snowflake Inc. (NYSE:SNOW) is well-positioned to benefit from this trend. Snowflake Inc. (NYSE:SNOW)’s strong financial health, including having no debt, gives it the flexibility to invest in growth opportunities.
Analysts are optimistic about Snowflake Inc. (NYSE:SNOW)’s future, pointing to its large market potential and the ongoing shift toward digital transformation as key drivers for the stock’s potential rise.
Alger Focus Equity Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q1 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a cloud-based data warehousing company that allows organizations to store, analyze and share data in a secure. scalable and cost-effective manner. This includes the Data Cloud. an ecosystem where Snowflake customers, partners. data providers, and data consumers can break down data silos and derive value from rapidly growing data sets in a secure, governed, and compliant way. Its platform supports a range of use cases. including data warehousing, data lakes, data engineering, data science, data application development, and data sharing. While the company reported an overall healthy fiscal fourth quarter. shares detracted from performance after management lowered their fiscal 2025 forward revenue guidance below analyst estimates. Further, the company announced that CEO Frank Slootman would be retiring from the role immediately, succeeded by Sridhar Ramaswamy, the former SVP of Al who has demonstrated impressive speed in bringing new Al products and features to market.”
6. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Investors: 95
Jim Cramer highlighted Walmart Inc. (NYSE:WMT)’s impressive quarter, noting that its success came from offering great value to shoppers. According to Cramer, this growth was largely due to increased transactions rather than higher prices, which he views positively as it avoids inflation-driven sales figures.
“Walmart proved that when you offer shoppers great value, they’ll keep coming back. That’s how Walmart managed to report a strong quarter, delivering 4.2% same-store sales growth, surpassing Wall Street’s expectation of 3.4%. Most of this growth came from increased transactions, not higher prices, which is preferable because it means the growth wasn’t driven by inflation.”
As the world’s largest retailer, Walmart Inc. (NYSE:WMT) leverages its scale to offer competitive prices and a broad product selection. Its extensive distribution network strengthens its position in both physical and online retail. A major factor behind Walmart Inc. (NYSE:WMT)’s positive outlook is its focus on e-commerce.
Walmart Inc. (NYSE:WMT) has been aggressively expanding its online presence by integrating its physical and digital operations. This includes rapid growth in e-commerce sales, driven by services like curbside pickup, home delivery, and Walmart+. Analysts often emphasize Walmart Inc. (NYSE:WMT)’s ability to perform well in various economic conditions and its success in capturing market share across different retail segments, which supports a bullish view of the stock.
5. ServiceNow Inc. (NYSE:NOW)
Number of Hedge Fund Investors: 97
In his recent Mad Money episode, Jim Cramer noted that two tech companies, including ServiceNow Inc. (NYSE:NOW), delivered outstanding sales, earnings, and forecasts. This strong performance and forward-looking guidance helped reassure investors amid a market downturn.
“First, we had two tech companies—just two—that delivered fantastic sales, earnings, and forecasts. That’s the magic trick kit that makes people feel comfortable buying even into tsunami of selling. These two companies includes ServiceNow. Both companies exceeded expectations and provided impressive forecasts. Interestingly, both are leveraging AI powered by the latest and greatest Nvidia chips.”
ServiceNow Inc. (NYSE:NOW) is a leading player in the IT Service Management (ITSM) and Enterprise Service Management (ESM) markets. Its comprehensive suite of products helps organizations streamline operations and improve efficiency. In its latest earnings report, ServiceNow Inc. (NYSE:NOW) showed strong revenue growth and consistent profitability. Analysts predict this positive trend will continue due to ServiceNow Inc. (NYSE:NOW)’s growing customer base and rising demand for digital transformation solutions.
ServiceNow Inc. (NYSE:NOW) invests heavily in research and development, constantly improving its platform and adding new features. This focus on innovation helps ServiceNow Inc. (NYSE:NOW) stay competitive and attract new customers. As more organizations adopt digital workflows and automation, ServiceNow Inc. (NYSE:NOW)’s products are well-positioned to meet these needs.
4. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Investors: 100
Talking about pharma stocks, Jim Cramer highlighted Eli Lilly and Company (NYSE:LLY)’s impressive earnings performance, noting that the company delivered the best earnings beat of the season and significantly raised its forecast.
“Eli Lilly, a drug company, delivered the best earnings beat of the season and raised its forecast significantly, thanks to its successful weight loss drug, GLP-1.”
Eli Lilly and Company (NYSE:LLY) has a strong lineup of promising drugs, including its successful diabetes treatment, Mounjaro (tirzepatide), which has proven effective for both diabetes and obesity. Eli Lilly and Company (NYSE:LLY)’s Alzheimer’s drug, Donanemab, has also shown positive results, establishing Lilly as a leader in neurodegenerative disease treatments.
To strengthen its research and product offerings, Eli Lilly and Company (NYSE:LLY) has made strategic acquisitions. The purchase of Dermira in 2021 expanded its dermatology portfolio while acquiring Prevail Therapeutics in 2020 enhanced its gene therapy capabilities.
Eli Lilly and Company (NYSE:LLY) has reported strong financial performance, with consistent revenue growth driven by its key products. Recent earnings reports showed increased revenue and earnings, reflecting overall strong performance. Additionally, Eli Lilly and Company (NYSE:LLY) has received regulatory approvals for several new drugs and benefits from partnerships with organizations like the National Institutes of Health (NIH) and other biotech firms, which provide valuable resources and collaborative opportunities.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter:
“Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
3. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Investors: 145
Jim Cramer praised Uber Technologies, Inc. (NYSE:UBER) for its impressive quarter, pointing out that the company’s strong performance underscores the ongoing demand for travel and activities. He emphasized that Uber Technologies, Inc. (NYSE:UBER)’s results reflect how people are still actively moving around and participating in various activities.
“Uber delivered an impressive quarter, demonstrating that people are still going places and doing things.”
Uber Technologies, Inc. (NYSE:UBER) has successfully expanded beyond its core ride-hailing services. Its delivery service, Uber Eats, has experienced notable growth, especially during the COVID-19 pandemic. The expansion of Uber Eats into new international markets and its partnerships with major restaurants have further boosted revenue. Additionally, Uber Freight and its Advanced Technologies Group are positioned to benefit from logistics and autonomous driving growth, respectively.
The acquisition of Postmates in 2020 enhanced Uber Eats’ delivery network and increased its market share in the U.S. In 2021, Uber acquired Drizly, an alcohol delivery service, adding to its range of offerings. Uber Technologies, Inc. (NYSE:UBER)’s advancements in autonomous vehicle technology and its development of the Uber Elevate aerial ride-sharing initiative highlight the company’s commitment to innovation.
Uber Technologies, Inc. (NYSE:UBER) is also focusing on expanding its presence in growth markets like Latin America and Asia. Financially, Uber Technologies, Inc. (NYSE:UBER) has shown improvement, with increased revenues and reduced losses. Uber Technologies, Inc. (NYSE:UBER)’s recent earnings reports reflect progress towards achieving profitability, including advancements toward positive adjusted EBITDA.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
Apple Inc. (NASDAQ:AAPL) continues to lead in consumer electronics with its innovative product lineup. The recent launch of the iPhone 15 series, with advancements such as the new A17 Pro chip and improved camera systems, strengthens Apple Inc. (NASDAQ:AAPL)’s position in the premium smartphone market. Additionally, Apple Inc. (NASDAQ:AAPL)’s introduction of new products like the Vision Pro mixed-reality headset reflects its commitment to pioneering new technology categories.
Jim Cramer noted that although Warren Buffett is highly respected, investors sometimes overreact to his actions, which can lead to poor decisions. He pointed out how unwarranted fears about weaker Chinese sales caused a sell-off in Apple Inc. (NASDAQ:AAPL) stocks, even though CEO Tim Cook had provided positive updates and later economic data was reassuring.
“Buffet’s the best there is. So he’s the best. People looking at his moves end up extrapolating to the point of absurdity and that’s why they dumped the bags, including Apple, based on fears of weaker Chinese sales. However, CEO Tim Cook had assured us just the week before that sales were likely strong, and I explained why throughout the week until we received positive jobless claims data.”
In its latest quarterly earnings, Apple Inc. (NASDAQ:AAPL) reported higher revenue and profit margins, driven by strong sales of its iPhone, Mac, and services. Analysts anticipate this growth will continue as Apple leverages its ecosystem to retain customers and boost new sales. Apple Inc. (NASDAQ:AAPL)’s services segment, including the App Store, Apple Music, Apple TV+, and iCloud, has become a major revenue driver, with a focus on expanding subscription services leading to more user engagement and recurring income.
Apple TV+ has enhanced its competitive edge in streaming with high-profile content and partnerships. The acquisition of Beats Electronics has strengthened its position in audio technology while buying the AI company Xnor.ai boosts its artificial intelligence capabilities. These acquisitions are expected to support Apple Inc. (NASDAQ:AAPL)’s innovation and competitive advantage.
Additionally, Apple Inc. (NASDAQ:AAPL)’s commitment to sustainability, including its goal to become carbon-neutral by 2030, appeals to eco-conscious consumers and investors. Apple Inc. (NASDAQ:AAPL)’s use of recycled materials and efforts to reduce its carbon footprint further bolster its brand reputation.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 219
Meta Platforms, Inc. (NASDAQ:META) remains a leading force in social media with its major platforms: Facebook, Instagram, and WhatsApp. Recent improvements to Instagram’s shopping features and Facebook’s targeted advertising have boosted user engagement and attracted more advertisers. Meta Platforms, Inc. (NASDAQ:META)’s vast user base continues to be a key driver for advertising revenue. Additionally, Meta Platforms, Inc. (NASDAQ:META) is heavily investing in developing the metaverse, aiming to create innovative virtual environments and experiences.
Jim Cramer highlighted that Mark Zuckerberg’s Meta Platforms, Inc. (NASDAQ:META), delivered exceptional sales, earnings, and forecasts, despite a market downturn. Meta Platforms, Inc. (NASDAQ:META) exceeded expectations and is leveraging advanced AI technology powered by NVIDIA Corporation (NASDAQ:NVDA) chips. (see 33 Most Important AI Companies You Should Pay Attention To).
“We had two tech companies that delivered fantastic sales, earnings, and forecasts. This is the magic formula that makes people comfortable buying even amid a market downturn. One of these companies is Mark Zuckerberg’s Meta Platforms. Both companies exceeded expectations and provided impressive forecasts. Interestingly, both are leveraging AI powered by the latest Nvidia chips. Meta, in particular, shared an impressive story about how it uses AI to design and enhance programs, delivering excellent returns on investment. For advertisers, this combination is unbeatable.”
Meta Platforms, Inc. (NASDAQ:META)’s strategy focuses on advancing its position in the emerging metaverse market with innovations like the Meta Quest 3, a cutting-edge VR headset, and Horizon Worlds, a social VR platform. These developments aim to drive long-term revenue growth through virtual goods and experiences. Meta Platforms, Inc. (NASDAQ:META) is also strengthening its technological capabilities and market presence through strategic acquisitions, such as Within, a VR fitness company, and Kustomer, a customer service platform.
Analysts expect that Meta Platforms, Inc. (NASDAQ:META)’s investments in technology, including AI-driven tools for better content moderation and personalized advertising, will boost future earnings.
While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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